Supreme Court Opinion Calls Into Question Hundreds of NLRB Rulings

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On Thursday, June 26, 2014, the Supreme Court issued its long-awaited Noel Canning decision and invalidated President Obama’s January 2012 appointments of three individuals to the National Labor Relations Board (NLRB), Terence Flynn, Richard Griffin, and Sharon Block. The Court held that while the President can make appointments during a Senate recess under the Constitution's recess appointments clause, the Senate's break in January 2012 was too short to constitute a recess. The board cannot conduct business without a three-member quorum, so the holding calls into question hundreds of labor decisions issued while those appointees were seated. The NLRB decided 436 cases during the 18 months that two of the appointees served on the board (the third stepped down after only several months).

The current board, all of whose members were confirmed by the Senate, must now decide if revisiting each of the 436 rulings will be necessary to preempt additional challenges. Reconsideration of the decisions is unlikely to make a difference, as both the previous board and the current board have been Democratic-controlled. Companies challenged over 100 of these NLRB opinions in federal court, which the courts may now remand to the board for reconsideration. "We are analyzing the impact that the court's decision has on board cases in which the January 2012 recess appointees participated," said NLRB Chairman Mark Pearce, the only current board member who served alongside the invalidated appointees. He also remarked that the board “is committed to resolving any cases affected by [the Supreme Court’s] decision as expeditiously as possible.”

While the majority of the 436 decisions are not controversial, several noteworthy opinions are likely to be reconsidered. Of the five most prominent opinions issued during this time, two concerned social media policies. In September 2012, the board ruled against Costco Wholesale Corporation’s social media policy as overly broad, because it could be construed as a ban on employee criticism of the company or its working conditions. In December 2012, the NLRB issued another social media-related decision, finding against Hispanics United of Buffalo, Inc. for firing five employees for responding on Facebook to a coworker’s remarks on their job performance. The NLRB found the Facebook posts constituted protected concerted action under the National Labor Relations Act, despite the company’s assertion that the employees were fired for harassing a coworker.

Two of the NLRB’s controversial opinions concerned the confidentiality of internal investigations. In July 2012, the board struck down Banner Health System’s policy that prohibited employees from discussing ongoing investigations into potential employee misconduct. The board held that an employer’s interest in maintaining an internal investigation’s integrity did not outweigh the potential restrictions the policy imposed on an employee’s right to concerted action. This decision impacts any private sector employer, regardless of whether its employees are unionized. The NLRB also handed down its Piedmont Gardens decision in December 2012, which overturned a decades-old precedent insulating companies from being forced to provide unions with witness statements concerning employee discipline. The board eliminated a “categorical exemption” that had protected the confidentiality of witness statements made in the course of an employer’s internal investigation. In place of the exemption, the board adopted a balancing test. Under the test, confidentiality is no longer guaranteed; instead, a statement will remain confidential only when a witness is reluctant to give an open statement due to the risk of intimidation, harassment, or other threatening circumstances.

A fifth opinion concerned company deductions of union fees. In December 2012, the board found in its WKYC-TV (Gannett Co.) opinion that employers were required to continue deducting union fees from worker paychecks per the arrangement set forth in the governing collective bargaining agreement, even after that collective bargaining agreement had expired. The ruling overturned precedent dating back to 1962, which set forth that employers could stop deducting union dues after the applicable contract had ended.

Whether the current NLRB decides to revisit several prominent decisions or all of the decisions impacted by the Noel Canning opinion, the board is likely to be backlogged for the foreseeable future as its sorts out the current posture of its rulings issued by the invalidated board appointees.